opment, but is is not an integral part of the model that is employed to guide the empirical analysis. The growth in the demand for food in the developing countries is projected to increase at an annual rate of 3.9 percent.* By comparison the production of food during the 10-year period 1955-57 to 1965-67 increased only 2.7 percent per year and during the first 6 years of the 1960's, it was down to 2.4 percent per year (4).
The urgency which pervades the FAO recommendations for increasing the tempo of agricultural development in the low income countries is strong and clear. The reasons for the urgency are also clear. At that time recent increases in food production had not stayed abreast of the increases in demand. The projected 3.9 percent per year increase in demand, between the FAO base years and 1985, would require an increase in the supply of food exceeding that achieved during the first half of the 1960's by 60 percent (3.9 compared to 2.4). Is such an increase feasible? The FAO answer is in the affirmative. In analyzing the prospect for success, the FAO report presents a very plausible case. The reason for this perspective is stated succinctly in the last volume (4, paragraphs 74 to 79).
I offer three comments on the FAO report. First, it is at its best in analyzing the utilization of land, the biological and chemical inputs, the mechanical components and engineering structures serving agriculture, and the institutional adjustments (land reform, credit institutions, and others). Second, the anticipated increases in the demand for food are probably on the high side with respect to population growth (2.6 percent per year), but somewhat on the low side with respect to income effects on the demand for food. I shall return to the income prospects later.
Third, although this report discusses prices at several points (in addition to Chapter 8 which is devoted to price policies), the treatment of prices is not an integral part of the analysis. The statements on prices are not amiss, but they are essentially ad hoc assertions. The critical role of relative prices of products and of factors of production and changes in these prices in determining the demand and supply is not an explicit variable. The overall economic growth model used in this study is of the fixed-price family of models. For this reason the FAO study does not analyze systematically the function of product and factor prices in the consumption and production of food. The omission of these prices as variables in the model seriously limits the validity and usefulness of the FAO recommendations.
A Modest Interpretation
This interpretation of my seven propositions is not intended to be complete; I simply want to identify several of the more important developments
*Thc "population effect" (increase in population) accounts for 71 percent and the "income effect" (increase in income) for 29 percent of this annual rate of growth in the demand (11, Vol. Ill, paragraphs 25 to 29).